SolarCity to start selling debt directly to investors within six months

By Claudia Assis

Solar City

SolarCity Corp. debt marketed directly to consumers will be offered during the first half of this year, the company’s new vice president of financial products said late Thursday. Terms of the financial products will be disclosed when they become available.

“Right now, customers come to SolarCity to buy clean energy. In the future, our goal is for our customers to be able to buy clean energy, or buy financial products backed by clean energy,” said Tim Newell, SolarCity’s new vice president of financial products, in e-mailed comments to MarketWatch.

Newell was president and chief executive officer of Common Assets, the platform developer, and joined SolarCity as part of the transaction.

“The amount of capital raised will obviously depend on investor acceptance and demand, but we believe that this platform could account for billions of dollars of capital over time,” he added.

The products will be offered to individual investors as well as community banks, foundations and endowments, family offices and other funds.

SolarCity tapped the bond markets in November, becoming the first company to sell solar bonds, and raised $54 million in securities backed by its solar leases. It was a relatively small sum, but it opened up the trillion-dollar asset-backed securities markets for the company and competitors.

By selling directly to investors, the company wanted to provide an avenue for more people and organizations to participate in the solar and clean energy market, beyond those who install solar panels on their roof, Newell said.

Opening up that new avenue will also “expand and diversify SolarCity’s sources of capital. Over time, that should reduce our cost of capital and enable a wider group of customers to take advantage of clean, affordable solar energy,” he added.

The solar bonds offered by the company in November were sold only to institutional investors. There is growing market appetite for solar bonds, which offer a stable source of cash flows over a long time horizon, according to a report from Deutsche Bank released earlier this week.

Shares of SolarCity turned lower in early trading Friday, recently off 0.3%. On the week, however, shares have gained 14%. The stock has risen 403% in the past 12 months, and 42% in the past three months.

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